Are brands in an activation race to the bottom?

by Nigel Hollis | July 20, 2016

With the inevitable shift from analog to digital, brands increasingly focus on marketing in the moment; reaching out to consumers when their behavior indicates a potential interest in the brand or its category. But will devoting more attention and budget on changing behavior when people are searching or shopping build or undermine brands?

My definition of a strong brand is one that people are predisposed to buy. One that, when the need arises, they instinctively reach for based on prior experience and pre-existing feelings, ideas and associations. One that they want to buy, and are willing to pay that little bit more for. But predisposition alone does not guarantee that a brand will be bought; it simply gives it a good head start.

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For me, strong brand predisposition is like qualifying for pole position on the starting grid of a Formula One Grand Prix. Pole position does not guarantee that a driver will cross the finishing line first, but it puts them in a far more advantageous situation than the one starting at the back of the grid. The driver in pole position will still have to drive well to maintain leadership, but it is theirs to lose.

It used to be that brands focused single-mindedly on building brand predisposition, but increasingly they are focused on trying to sway people’s behavior when they are actively engaged with the category. Behavioral tracking systems monitor real-time activity using specific data cues as proxies for interest  and intent, and programmatic systems then deliver a pre-specified call to action. In the short-term I have no doubt that these systems deliver increased conversion, but I do wonder what they do to longer-term profitability.

Never mind that the data used to target people is often selected based on what can be measured, rather than what should be measured. Never mind that much of the behavior is assumed to indicate interest in purchase when often it does not. Never mind that much of the advertising is delivered well after a purchase has been made. No, my concern rests in the fact that to sway a person’s brand predisposition there are few more compelling appeals than a price discount or special offer.

Just as the advent of scanned sales from grocery stores led to an over-emphasis on sales promotion, I believe we are seeing exactly the same thing in digital media but on a far wider scale. Brands in many categories are involved in an activation race that will not only teach consumers to be focus on prices and special offers, but may well undermine brand predisposition as well. Why? Because the more we encourage people to switch, the less likely they will be to assume that their current brand choice is a good one. Right now activation ignores benefits from brand predisposition, since it primes people to respond well to activation ads from familiar brands, but in future it may all come down to how good an incentive you put in front of them.

So what do you think? Is brand predisposition important? Will its importance be undermined by an undue focus on activation? Please share your thoughts. 

5 comments

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  1. Nigel, October 12, 2016
    Thanks for the comments. Mark, great build and very true. The primary role of a brand for most people is to reduce and simplify decision making. And Sudeep, yes, how to ensure you get good conversion from predisposition is important, that is where salience comes in. Make sure sure your brand comes to mind first when the need arises and then make sure that it is simple and easy to buy.
  2. Mark Russell, July 26, 2016

    I also love the F1 analogy - racing offers many relevant business insights (here's another fave - you can't win if you follow the path of the person in front of you.)

    One thing not covered here is how much people hate making decisions. A big benefit in having a loyal association with a CPG product is you never have to make a decision about that product again. The weekly shopping experience (which is not enjoyable for most) speeds up and simplifies when half the products purchased are routine purchases. A special offer on another unknown or less-known product means the person has to stop, contemplate, and go through an entire decision-making process (to save $0.50?)

    The current focus on activation strategies and geo-targeted offers may be partly motivated by the fact it’s new(ish) and possible. But I think people, the humans we are marketing to, would actually like to make even fewer decisions in their daily lives and this phenomenon does not serve that desire. If that observation has merit, then a continued focus on brand predisposition will provide dividends when the ebb and flow on brand loyalty flows back toward loyalty. I don’t agree that we’ve changed forever on brand loyalty.

  3. Sudeep, July 22, 2016

    Agree the brands should focus upon building the predisposition than getting into the activation warfare to attract more consumers, but most of the times in terms of usage/product quality/experience the brand may not have differentiated offer in the category - besides their communication claim (They claim to be different but they actually are NOT differentiated, which consumers also know based on past experience/taste/quality) 

    With weakening economies & growing cost savings approach adopted by consumers : Most of the brands are offering price promotion to steal from market leader - the result is market leader is also subjected to justify the value for money image by offering some discounts  particularly in CPG categories where you find more of repertoire buyers than loyal buyers.

    It is possible that brand will have a good head start due to predisposition but may not be the final choice - I guess what matters more is how to maintain leadership after having a good predisposition?  

  4. Jamie Lord, July 22, 2016

    I love the pole position analogy Nigel. 

    Timely advice for our companies. 

  5. Michael S, July 21, 2016

    Sir, you are spot on!

    If we consider the importance of strong psychological/emotive drivers behind consumer's choosing brands, it is critical to create predisposed demand for a brand. Research shows that emotional drivers trump rational considerations, and consumers actually seek to validate their predisposed perceptions when making purchases. So a smart brand communications strategy would be to leverage this innate behavior by seeding desirable perceptions so that they are shared across the target population to drive up brand demand resulting in greater market share. I'm not saying that a "moment" isn't important. But brands with greater intrinsic demand will win out vs. those that wait until the moment alone.

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